As far as Android translation apps go, Google Translate is still among the best available - sure, it isn't perfect, but it's free and for the occasional translation it'll suffice. To celebrate the app's first birthday, Google has updated it to 2.0 and added a new feature called "Conversation Mode."

Conversation Mode allows you and your foreign friend to speak in two different languages before having Google Translate display the words you say onscreen in your native languages (as seen in the second screenshot above). For now, it only works with Spanish and English, and it has problems with regional accents, background noise, and rapid speech, but it's a start. This version of Translate was also demoed using German at the 2010 IFA conference:

Version 2.0 also includes an updated UI, which looks quite slick. Google seems to have finally realized that people appreciate good-looking user interfaces - let's hope this carries over to the rest of their Android apps (and the Android OS itself, too).

Try v2.0 of Google Translate for yourself using the QR code and the AppBrain link below: